Magnolia Marketplace

The good and the bad of the public improvement district movement in Mississippi can be found in Madison County, right next to each other.

Ridgeland’s Colony Park PID has flourished, anchored by Renaissance at Colony Park and its retail and housing units that have turned the Highland Colony Park area into one of Metro Jackson’s most successful. It’s adding amenities. Officials broke ground last fall on bike trails and walking paths paid for by transportation enhancement funds from the Mississippi Department of Transportation.

Just to the north of Colony Park, winding from Madison to Gluckstadt, Parkway-East PID represents the inherent financial risk some PIDs carry. It is named after a 4-mile, four-lane boulevard that runs parallel to I-55 and connects Madison and Gluckstadt. Late last year, developers were unable to service the PID’s debt, and plans for a waterpark and an amphitheater stalled. Because Madison County guaranteed the bonds, taxpayers there had to shoulder the financial burden. In October, the county was officially on the hook for nearly $400,000.

The concept of a PID is simple: Property owners can gather and essentially tax themselves to build something or provide a service their city or county otherwise could not. Some PIDs have convinced counties or other local government entities to guarantee their debt.

For those who have, Secretary of State Delbert Hosemann is proposing instituting standards that would govern post-construction valuation practices. The proposal is one part of Hosemann’s bundle of business reform legislation he will submit this session.

“Unfortunately, because of the success of some of these PIDS, they went and replicated it, and some of them have failed,” Hosemann said. “We have quantified the method of valuation of property post-construction. Some of these have had some enthusiastic appraisals. They didn’t materialize, and the liens on the property were so high that they eventually forfeited to the state, which does no good for anybody.”

As of late Wednesday, the bill had not yet been introduced. The bill-filing pace at the Capitol started to quicken last week after an abnormally slow start due to the installation of new leadership in both chambers.

When it is filed, the legislation would require the appraisal of PID property post-construction to adhere to standards other commercial and residential property is already subject to. It would only apply to PIDs with government-backed loans. The way the law reads now, there are no standards governing post-construction valuation of PIDs.

“This would utilize standards that were proposed by real estate appraisers and tax assessors,” Hosemann said. The bill is the result of committees made up of business professionals and government officials Hosemann formed.

“Clearly, there were holes in the valuation process of some sort because we’ve had a giant default,” Hosemann said. “We want to make sure everybody has taken a real close look at all this and we have good appraisal methodology. We need confidence that the guaranty of the county is not going to be called upon.”

Derrick Surrette, executive director of the Mississippi Association of Supervisors, sat on the committee that formulated the PID legislation.

“Some of these PIDs just haven’t performed like they thought they would” and have created a financial burden for counties that have backed them, he said.

“It’s a tax. That’s the nuts and bolts of it. We have to make certain taxpayers are protected, and I think this has the potential to do that. Another thing I hope this bill will do is prevent counties from being stuck with property with a tax lien that’s worth more than the property itself. I hope it will allow these counties to sell these properties. PIDs can be a good thing. They’re not all bad. But when they do go bad, they’re a tax; in some cases, an expensive tax.”

One piece of Secretary of State Delbert Hosemann’s legislative bundle seeks to wring more use out of a jobs tax credit the state makes available to business start-ups in Mississippi.

What the bill would do is allow for an employee “pass-through” of a jobs tax credit that currently benefits only business owners. 

“What it does is if you had an entity, a corporation or an entity that’s being taxed, and you’ve just started out, you probably didn’t make money the first year,” Hosemann said. “Most businesses don’t. So you have job credits and other things that accrue to the business that are not used.”

Although the state has obligated itself to awarding the credit, there is no taxable income to trigger it, so it lies dormant.

Employers who would otherwise be ineligible for the jobs tax credit could shift it to their employees in $250 increments, according to the legislation, which hasn’t officially been filed yet, but will be before the bill deadline next month, Hosemann said.

Hosemann said he and his staff consulted with the Mississippi Department of Revenue in arriving at the $250 increments, “so we don’t have a bunch of $8 credits or something like that” awarded.

“For example, if I had a $50,000 jobs tax credit and I had 200 employees, I could give each of them $250 worth of credit on their personal income taxes,” Hosemann said. “(Business owners) can give them to their lowest-paid employee or their highest-paid employee. We left them flexible, but it’s the same dollars that we obligated to give them as a credit for coming here anyway.”

A primary benefit of allowing an employer-only tax credit to pass through to employees, Hosemann said,  is it would make Mississippi more competitive with neighboring state Tennessee in attracting new industry. Tennessee has no personal income tax. Mississippi does, and Hosemann said that puts economic developers  — especially those close to the Tennessee border in North Mississippi – at a disadvantage.

“Of course, they’re taxed really at a higher level than we are, based on property taxes and a few others, but it sounds good to say that there’s no income tax. It’s a barrier to us attracting industry here. This makes me competitive with Tennessee, because now I don’t have any personal income tax, either.”

In 2010, Mississippi and Tennessee both offered what were termed by a company spokesperson “very generous” incentives for Pinnacle Airlines to expand its corporate headquarters and locate its 600 employees. At the time, Pinnacle’s total number of employees nationally had just grown to nearly 8,000 after it bought Mesaba Aviation from Delta Airlines. The move made Pinnacle’s corporate headquarters a trophy economic development project.

One of the sites Pinnacle considered was in DeSoto County. The company ultimately picked Memphis.

“Now we’re using it at the employee level, instead of it sitting there not being used, or in the case of Tennessee, being used against us,” Hosemann said.

Mississippi Development Authority interim executive director Leland Speed has sued Secretary of State Delbert Hosemann, in an attempt to keep the eminent domain petition off November’s ballot.

If you’ll recall, the petition seeks to prevent the taking of private land for private development. It keeps in place the state’s authority to seize private land for public-use projects, like streets or bridges.

Nearly 120,000 people signed petitions to get the issue on the ballot. Hosemann certified the results last year.

The Mississippi Development Authority and Gov. Haley Barbour were adamantly against the notion of eliminating the state’s authority to use eminent domain for private economic development. Barbour and Gray Swoope, Speed’s successor at MDA, warned that projects like Toyota wouldn’t be in Mississippi if the law were changed.

Following a failure to change the law in the Legislature, a petition drive led by the Mississipi Farm Bureau Federation commenced, and the issue was set for the November ballot, until Thursday afternoon.

A hearing on the matter is scheduled for July 25 in Hinds County Circuit Court.

Pamela Weaver, spokesperson for Hosemann, just told Magnolia Marketplace that he would not comment beyond a statement, in which he said he intended to follow state law and place the initiative on the ballot, unless otherwise ordered by the Mississippi Supreme Court.

We’ve left a message on the cell phone of an MDA spokesperson, which wasn’t immediately returned.

For what it’s worth, Magnolia Marketplace several months ago polled the major contenders in the governor’s race — Phil Bryant, Dave Dennis, Bill Luckett, Johnny Dupree and Hudson Holliday — and they were of one mind: Eminent domain should be employed only for projects of direct public use, and that doesn’t include private economic development. Bryant, Dennis and Holliday each signed the petition to get the initiative on the ballot.

If and when we hear something from the MDA, we’ll post it. Rest assured, though: This is going to be a fight.

UPDATE: MDA spokesperson Melissa Medley just returned our call. She said that agency would have no comment on Speed’s lawsuit since he filed it as an individual, and not in his official capacity as interim executive director of the MDA.

We just got off the phone with Speed’s assistant, who said he was out of town and wouldn’t return until Monday around lunchtime. We’ll try to catch up with him then.

Mississippians, and we’re not breaking any new ground here, are generous folks.

The holiday season brings out the best of that generosity, but it also turbo-charges the counter-culture of charitable scams.

Secretary of State Delbert Hosemann has kicked off his annual campaign to keep those scams to a minimum.

Hosemann’s “Check Your Charity” tool is available on his website here.  Check Your Charity publishes the financial particulars of charities registered with the state, which they’re required by law to do. You can get a break down of  how much money actually went to a charity’s cause, and how much went elsewhere.

The Better Business Bureau says that a valid charity spends at least 65 percent of its money toward its mission. 

So after you’ve verified that your targeted charity is legit, give as much as you can so we can maintain our reputation for being nice and caring people.

Mississippi’s political community got a double shot of sad news today.

Northern District Transportation Commissioner Bill Minor died suddenly of what appears to be a heart attack at the Beau Rivage in Biloxi. Minor was attending the annual meeting of the American Association of State Highway and Transportation Officials.

Sam Waggoner, who once represented the Central District on the Transportation Commission, passed away at his home in Flowood this morning.

Minor, 68, served in the state Senate before being elected to the MDOT post in 2003.

Minor’s death leaves vacant one of three spots on the Transportation Commission. According to Secretary of State Delbert Hosemann, Gov. Haley Barbour will have to issue a proclamation within 15 days that would set the date for a special election. The election would have to occur within 60 days of that.

Hosemann said in a press release that he would recommend to Barbour that the qualifying deadline be at least 45 days before the special election, so officials would have adequate time to prepare ballots. Barbour is not bound by Hosemann’s recommendation, but it’s very likely he would follow it.

Minor was popular with his constituents. Magnolia Marketplace’s direct interaction with him was limited to a handful of times, but he was polite, accessible and never dodged a question. His successor has big shoes to fill.

Secretary of State Delbert Hosemann had one of the most memorable — and effective — political advertisements in recent Mississippi memory three years ago.

Hosemann sat on a park bench with a little old lady, who laid out his message, and called Hosemann Gilbert, Wilbert, Engbert, Philbert, and Engelbert, but never Delbert. It was one of the best political spots we’ve ever seen.

A lot of people think the commercial is more responsible than anything else for Hosemann’s victory. They’re probably right.

Dorothy, the little old lady in ad, is back. This time, she’s helping with Hosemann’s voter education campaign in advance of the Nov. 2 elections. Radio and television spots will soon begin airing statewide, and Dorothy’s celebrity will begin anew.

This Friday is also the first “Voter Fact Friday,” in which Hosemann will release tidbits related to common voter questions, such as absentee voting guidelines and precinct location issues.

Magnolia Marketplace just returned from Secretary of State Delbert Hosemann’s office, where the Mississippi Farm Bureau Federation delivered 119,251 signatures of registered voters who oppose using eminent domain for private economic development projects.

The issue will very likely be on the ballot in 2011.

Lots of media were there for the ceremony, including our favorite reporter ever, Bert Case of Jackson television station WLBT.

Case asked Hosemann if he would run for re-election next year, or seek a higher office. The rumor mill has been churning for some time now over that very question.

“Are you addressing that to David?” Hosemann retorted, with a hearty laugh. “I think we’ll stay on eminent domain today.”

Afterward, Magnolia Marketplace asked Waide if he had made a decision about next year’s elections. He too has been the subject of a lot of speculation. He will step down from Farm Bureau Dec. 6.

“I’m President of Mississippi Farm Bureau,” Waide said. “I asked the people in ’96 to elect me, and I promised them I’d serve my term. I’m stepping down Dec. 6, but I actually  have not made a decision. I don’t anticipate announcing prior to my leaving office.”

So has Waide not made a decision about whether to run, or has he not made a decision about which office he’s going to seek?

“I have not made a decision about whether I’m running or not,” he said.

So there you go.

Looks like the question of whether to use eminent domain for private economic development projects will be on the 2011 ballot. Here’s a release Farm Bureau sent out earlier today:

JACKSON – The Mississippi Farm Bureau Federation today delivered more than 118,000 certified signatures to Secretary of State Delbert Hosemann so that the issue of eminent domain reform can be placed on the November 2011 ballot for the people of Mississippi to vote on.

After several failed attempts to get an eminent domain reform bill passed in the legislature, the Mississippi Farm Bureau Federation (MFBF) decided to go the initiative route and gathered the necessary signatures to allow the people of Mississippi to speak on the issue of private property rights.

“For three years, Farm Bureau urged legislators to protect homeowners and landowners from confiscation of their private property by eminent domain, but to no avail,” said MFBF President David Waide.  “The 2009 Legislature passed H.B. 803, which prohibited the taking of private property under the guise of economic development for private development or business. Both House and Senate passed the bill, but Governor Barbour vetoed it.”

In 2005, the U.S. Supreme Court held in a 5-4 decision in Kelo v. City of New London that a Connecticut city could take away people’s homes and turn the property over to a private party to develop the property for its own profit. The Court justified this result because the increased tax revenue on the developed property would benefit the public and the use of the property was, therefore, a public use.

Farm Bureau and many others disagree with this decision.

Since 2005, forty-four states have strengthened their private property rights laws to keep property from being taken by eminent domain and used for economic development.  This initiative will give the people of Mississippi the right to vote to ensure that eminent domain will be used only in the traditional ways for public use such as roads, schools, and utilities.

Mississippi Farm Bureau President David Waide has told a couple Mississippi media outlets the past few days that supporters of an eminent domain initiative are getting really close to gathering enough signatures to put the issue on the 2011 ballot.

With Waide telling a newspaper in Tupelo that enough signatures have been gleaned from three of the four required Congressional districts, it would be a surprise at this point if organizers did not meet the Oct. 6 deadline to submit their documents to the secretary of state’s office.

The notion that government can use eminent domain to benefit a private enterprise is one of the most contentious political issues Magnolia Marketplace has covered. It is a near certainty that it will be a major talking point for statewide candidates next year.

The most interesting dynamic will likely play out on the Republican side of the field. Lt. Gov. Phil Bryant, who will run for governor in 2011, did not strongly commit one way or another on the issue during the 2009 session, when the Senate narrowly upheld Gov. Barbour’s veto of a bill that would have restricted the use of eminent domain to projects of public interest, like roads and utilities. It would have been really interesting if the sustain/override vote in the Senate would have required Bryant to break a tie. He’s probably glad it didn’t.

Barbour spent many hours and a lot of energy lobbying lawmakers after he vetoed the legislation, which originally passed both chambers easily. It didn’t garner a single nay in the Senate, clearing that body 52-0. The crux of Barbour’s argument was that things like Toyota and Nissan would not be here if the state were not allowed to use eminent domain during the development of each.

Waide told the Mississippi Business Journal earlier in the summer that he expected enough signatures to arrive some time in September, and that timeline looks like it will be met. Voters will most likely decide the issue next fall. This is one of those issues where candidates will have to go all in or all out. There is no comfortable middle ground. The landowners’ rights lobby and economic development groups both have deep pockets and big voting blocs. Alienating either is never a good campaign strategy, so candidates have a tough decision to make.

The Mississippi Economic Council’s annual Transformation Tour stopped in Jackson this morning at the Hilton on County Line Road.

A few hundred folks crammed into one of the hotel’s ballrooms to hear a handful of elected officials offer their take on the upcoming legislative session.

Lt. Gov. Phil Bryant touted the Commission for a New Mississippi’s recommendations to overhaul the state’s budgeting system. Bryant unveiled the plan Monday, and used the same arguments today as he did then.

Bryant said the state desperately needs to develop a strategic plan and tie the allocation of state funds to agencies to the components of that plan. The performance-based budgeting concept is a big part of the Commission’s goals.

“If nobody’s monitoring your level of success you’re probably not going to get much accomplished,” Bryant said. Magnolia Marketplace is writing a story for next week’s MBJ that will take a long look at the Commission’s report and try to gauge how it will play when lawmakers convene in January. Here’s a hint: Some parts of the plan stand a better chance at becoming reality than others.

Secretary of State Delbert Hosemann touted the new Blue Book and warned against the inclination some legislators may have for diverting 16th Section revenue from school districts to the general fund. Hosemann’s legislative agenda includes reforming the state’s LLC, trademark, tradename and uniform commercial code laws.

Institutions of Higher Learning Commissioner Dr. Hank Bounds and State Board of Community and Junior Colleges Executive Director Dr. Eric Clark both said that their respective levels of education were Mississippi’s key to properly emerging from the recession. New State Superintendent of Education Dr. Tom Burnham, who just started his second stint in that seat, echoed Bounds and Clark.

The Transformation Tour started Nov. 9 in Greenwood and will end Dec. 10 in Gulfport. In all, 12 cities across the state will host or have already hosted the event.